What Would Happen to the Equilibrium Price and Quantity of Peanut

question 262

Multiple Choice

What would happen to the equilibrium price and quantity of peanut butter if the price of peanuts went up, the price of jelly (a complementary good) fell, fewer firms decided to produce peanut butter, and health officials announced that eating peanut butter was good for you?

• A)price will fall and the effect on quantity is ambiguous
• B)price will rise and the effect on quantity is ambiguous
• C)quantity will fall and the effect on price is ambiguous
• D)effect on both price and quantity is ambiguous

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Definitions:

Simple Additive Decision Rule

A decision-making process in which options are evaluated by summing up the merits or scores of their attributes, simplifying the choice among multiple alternatives.

Decision Rules

Guidelines or criteria used by consumers or individuals in making choices among various alternatives.

Ethnocentrism

The belief in the superiority of one's own ethnic group or culture, often leading to judgment of other cultures solely by the values and standards of one's own culture.

Simple Additive Rule

A decision-making process where each option is evaluated and scored on several criteria, and the scores are simply added up to make a decision.